Soaring Phenol Prices Force HPL Industry to Cut Production

The unexpected jump in Phenol prices during last week of September and first week of October has shocked the High Pressure Laminate and Plywood Industry. Till writing this report, the phenol prices are registered to cross 140 level and reports from chemical suppliers and importers indicated that it will soar higher further because there are less inventories stock at port. A Mumbai based Importer opined that due to strengthening dollar prices against rupees, they became alert for further import of materials as they are making loss due to weak rupee. He says that the poor inventory stock and high dollar prices are the main reason behind jumping phenol prices including other chemical prices such as Methanol and Melamine.

Another phenol importer from Gujarat says that a domestic unit has started production of phenol in India, which is having huge manufacturing capacity and it was expected their production to be streamlining shortly that’s why they reduced the import volume. Suddenly, this domestic phenol unit went for some maintenance that has created short supply in market. The phenol prices reported to go up more than 25 percent in a month period has created chaos like situation in HPL industry.

Many HPL producers decided to cut their production with immediate affect because it is not possible to pass this high cost to market. A Gujarat based laminate producer says that apart from phenol prices, other raw materials such as formalin, melamine and craft paper cost has gone high during this period, so it is very much difficult to absorb this high cost by a producer. At the same time, demand is low; hence to pass this cost to market is also a herculean task. Another producer says that it is wise to cut production thus making loss to produce material at this high cost. Other Sources confirmed to The Ply Reporter that phenol price will soften within couple of months although high dollar prices will disturb the manufacturing cost, hence it is catch 22 like situation for industry.